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Tricon Television29 Inc. (Tricon) applied for judicial review of
a decision made by the Canadian Audio- Visual Certification Office
(CAVCO) denying Tricon's application for certification of its
production "Beautiful People" as "Canadian"
pursuant to section 125.4 of the Income Tax Act and
section 1106 of the Income Tax Regulations.
Tricon's application was made primarily on the basis that
"Beautiful People" was a documentary production and the
two most prominently featured individuals in the production, Greg
Hodge (a British subject) and Robert Hintze (a Danish citizen),
should not be considered "Lead Performers" based on
CAVCO's definition of "Lead Performers" as set out in
its Canadian Film or Video Production Tax Credit (CPTC)
guidelines.
Decision
On April 7, 2011, the Ontario Federal Court concluded that there
is no basis upon which to set aside CAVCO's decision denying
Tricon's application for certification of "Beautiful
People" as "Canadian". Based on its review of the
relevant legislation and submissions, and having regard to the
screen time, billing and remuneration paid to Hodge and Hintze, the
Court ultimately determined that Hodge and Hintze were the first
and second "Lead Performers" in the production, and since
neither one of them is Canadian, "Beautiful People" was
ineligible for certification as a "Canadian"
production.
Highlights of the decision
The case is instructive for 4 reasons:
(1) apparently, Tricon did not engage in any discussions with
CAVCO to confirm that the "Beautiful People" production
was eligible for the CPTC certification before the application for
certification was filed;
(2) it was not considered relevant to determine whether or not
the production "Beautiful People" was a reality program
or documentary since, in either case, Hodge and Hintze were
classified as non-Canadian "Lead Performers" causing the
production to be ineligible for certification by CAVCO as a
"Canadian" production;
(3) neither CAVCO nor the Ontario Federal Court was persuaded by
the fact that the Canadian Radiotelevision Telecommunications
Commission (CRTC) made an exemption for "Beautiful
People" from its requirement that the production must include
a Canadian lead performer; and
(4) Tricon was not able to avail itself of subsection 1106(9) of
the Income Tax Regulations which provide:
(9)A documentary production that is not an excluded
production, and that is allotted less than six points because one
or more of the positions referred to in paragraph 5(a) is
unoccupied, is a Canadian film or video production if all of the
positions described in that paragraph that are occupied in respect
of the production are occupied by individuals who are
Canadians.
Confirm eligibility requirements
Film and television producers intending to apply for a Canadian
film or video production certificate pursuant to section 125.4 of
the Income Tax Act and section 1106 of the Income Tax
Regulations should always ensure (among other things) that
their production is not considered an excluded genre and that they
are able to meet the "points test" requirements for
"Lead Performers" and other key creative personnel as set
out in section 1106 of the Income Tax Regulations. If
there is any doubt about eligibility, producers are advised to
consult their production counsel and/or CAVCO directly for
clarification of CAVCO's guidelines and the applicable
Regulations.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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